A New Year Kicks In With Lower Mortgage Rates

The drop in mortgage rates during 2019 marked a dramatic turnaround from the previous year expectations, when mortgage rates briefly reached 5 percent and the Federal Reserve indicated two interest rate increases. Instead, surging trade wars shivered confidence in the markets, the Fed cut rates and investors —hungry for the relative security of mortgage debt that they were willing to accept lower yields— drove mortgage rates down.

A new decade started and 2020 greets home shoppers with lower mortgage rates compared with 2019. The 30-year fixed-rate mortgage averaged 3.72% this week, compared to 4.51% at the beginning of 2019.  In the past two months, the thirty-year rates have floated around 3.7% average, showing some stability in mortgage rates over the last few weeks.  

Sam Khater, Freddie Mac’s chief economist said: “The stability is welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market and other interest rate-sensitive sectors. The low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices.” 

Pending Home Sales Jump 

The  national averages with mortgage rates reported by Freddie Mac for the week ending Jan. 2 are as follows:

  • 30-year fixed-rate mortgages: averaged 3.72%, with an average 0.7 point, falling slightly from a 3.74% average a week ago. Last year at this time, 30-year rates averaged 4.51%. 
  • 15-year fixed-rate mortgages: averaged 3.16%, with an average 0.7 point, dropping from last week’s 3.19% average. A year ago, 15-year rates averaged 3.99%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.46%, with an average 0.3 point, rising slightly from a 3.45% average last week. A year ago, 5-year ARMs averaged 3.98%. 

The drop in mortgage rates was a save on the budgets of potential homeowners, who could take out larger loans for the same monthly payments; however, economists say housing affordability will become a more pressing issue in 2020, determining where people live and how they spend. 

After mortgage rates dropped, home price appreciation accelerated, ending 13 months of slowing home price growth, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index, a measure of home prices.

The National Association of Realtors: The trade association for real estate agents predicts moderate growth in the housing market and continued low mortgage rates. The experts predicts that the low rates will last. It is expected that the 30-year fixed mortgage rate will remain below 4% in the coming year, moving to 3.8% by the end of 2020.  

We, at Title Partners of Florida,  write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products,  and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone (844) 321-6168 or by email titleinfo@titlepartnersfl.com. 

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New Homeownership Gains in the U.S. Headed by Latinx Americans

A recent report released by Zillow revealed that the number of households headed by a Latinx member that own their homes is at its highest since 2008. Latinx refers to individuals who identify with Latino, Hispanic, or Spanish origin. There are roughly 60 million people in the US who identify as Latinx, comprising 18% of the US population. However, they account for over 60% of new U.S. homeowner gains according to the Housing Survey conducted by the U.S. Census Bureau in 2019. 

As a consequence of 2008’s Great Recession, Latinx headed households constituted 19.4% of all homes foreclosed between 2007 and 2015. This makes the recent gains in ownership even more meaningful when put into perspective that only 3 years ago the Latinx homeownership rate was at 44.1%, its lowest since 1998.  The current Latinx homeowner rate is at 48.9%, the highest it has been since 2008.

Referring to this phenomenon, Manny Garcia, population scientist at Zillow said:

“While Latin households have made recent gains in ownership, longstanding inequities in intergenerational wealth and other systemic barriers continue to impede Latin Americans from reaching parity with the U.S. population as a whole.”

Manny explains how despite the increase in Latinx homeownership gains is substantial, there are still many roadblocks for the community. 

Garcia continues by saying: “Latin home buyers are more likely to face challenges during the process, with financing the purchase often reported as a primary concern.”

Manny Garcia’s reasoning is backed by the fact that even though recent gains have benefited the community, the Latinx homeownership rate is still 10% behind the rate for Asian, Native, Hawaiian, and Pacific Islander households. And nearly 25% behind non-Latin white households. The difference in household wealth is a big factor as the average Latinx headed household has an income of only 75% of the average non-Latin white household. Therefore, Latinx houses comprise a greater percentage of their wealth. 

First-generation Latinx Americans possess the lowest homeownership rate of the community with only 46% of the overall members owning a house. While other generations have a 50% or greater homeownership rate. Nonetheless, Latinx buyers, in general, are more likely to be first-time buyers. 56% of Latinx buyers of first-time homeowners, compared to 43% of buyers overall. 

Manny Garcia also stated that “even within the Latin community, wealth inequality could help explain the varying homeownership rates of people of different origins.”

People of Spanish and Argentinian descent have the highest homeownership rate within the community, 63% and 59% respectively. While other groups have homeownership rates as low as 29%. 

We, at Title Partners of Florida, write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products, and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone at (844) 321-6168 or by email at titleinfo@titlepartnersfl.com.

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Despite COVID-19, Luxury Real Estate Still Selling in South Florida

As with many things in 2020, the housing market is in an “uncertain” place right now. In previous months, the industry has seen an increase in new home mortgage applications in regards to 2019, amid the Coronavirus. But, at the same time, experts forecast a tsunami of chapter 7 bankruptcy cases due to the impact COVID-19 has had on the economy. So the question arises: what does this mean for the Luxury Real Estate market? Pretty good news, actually. 

Despite the current crisis, luxury real estate sales are skyrocketing in South Florida. Several multi-million dollar properties were bought in August alone, and houses that have been in the market for a long time, are now being sold. 

Palm Beach, Coral Gables, Miami Beach, and Coconut Grove have all witnessed home purchases exceeding the $10 million mark, and all in the span of a few of weeks. Here’s a list of a few luxury properties sold in August:

Luxury real estate sales have been in an increase for the past several months nationwide. For sellers, this translates as a great moment to list their properties in the market, if they had intention of doing so previously. 

When evaluating the current state of the luxury real estate market, Petra Liebmann, CEO of the Corcoran Real Estate Group stated that “a growing number of luxury buyers are looking for additional square meters and residential furnishings such as theaters and pools. For many apartment hunters in South Florida, “privacy” and “space” are the keywords. “

These current times might not be the best for most realtors, but in spite of COVID-19 there are deals happening! Realtors must take new action to get in front of their customers, innovate their marketing, get on social media (check our blog on social media tips on how you can promote yourself online). Those who adapt to the changes will be the ones who make the most out of any situation. Make sure that is you!

We, at Title Partners of Florida, write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products, and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone (844) 321-6168 or by email titleinfo@titlepartnersfl.com.

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Social Media Becomes Realtors’ Solution to COVID-19

No one expected 2020 to be the year of a global pandemic. Up until the initial months of the year, everything was business as usual (with a few exceptions). But now COVID-19 has changed the way we live our lives. And has also changed the way we do business. This is especially true when it comes to realtors. Social distancing and mandatory lockdowns have forced realtors to transition from open-houses to more modern and innovative approaches to showcase properties. In consequence, realtors have taken advantage of a tool with immense power for brand awareness, engagement, and influence: Social Media.

In the first quarter of 2020, realtors were still conducting their businesses and attending their buyers the same way they have been for years before. The real estate market was a predominantly “in-person” industry. Property viewings, signings, and notarizations were actions that needed to be done in person. There were alternatives, they just weren’t paid too much attention.

On January 1, 2020, the state of Florida passed House Bill 409 and became the 21st state to adopt Remote Online Notarization (RON). This new bill allowed real estate professionals to close transactions, even if one of the parties were not physically present. For this, audio and video communication is used to notarize the signer’s electronic signature on electronic documents. However, in the first quarter of the year, very few realtors were registered to take advantage of the bill. It wasn’t a priority for the times. But this changed with COVID-19.

With quarantine orders putting a halt on the real estate market, realtors hastily searched for alternatives to keep their businesses in full swing. Insert the recent increase use of Virtual Showings, 3D Virtual Real Estate Tours, and Social Media. 

Social Media is the perfect solution for realtors to face the problem of getting in front of their clients. Besides the fact that through Live Broadcasts, realtors can showcase a property to a considerably larger amount of people than possible in person. Many have already started implementing the use of Facebook Live and/or Instagram Live to display their listings, answer questions or doubts, and provide any extra information.

In addition, through Social Media, you also have the benefit of being able to reach a broader audience. The more followers, subscribers, or “friends” you have on Social Media, the more chances you have to find high-quality clients that are ready to purchase. It also allows you to interact with clients, increase engagement with your content, and be more likely to be recommended to other buyers. There are virtually no limits to the growth you may have on Social Media. And those who have an active social network are the ones who are getting the buyers, listings, and transactions. However, not everybody is highly tech-savvy, and the change in the industry might be harder for some to assimilate than others. 

If you are looking to take advantage of Social Media to impulse your business, here’s what you need to do:

  • Make sure your profile is up to date. Irrelevant profiles will not get attention and interest from buyers. Check that your social accounts do not have outdated information and have a fresh and modern look. 
  • Post great content. Provide your followers with content they can benefit from, in a very fashionable manner. Make sure you have images and videos that are visually appealing and provide the viewer with information that they will be happy to receive and share with others. 
  • Get involved with local Facebook Groups. Your buyers are on Facebook. That’s an absolute certainty. Join local Facebook Groups to interact with the local community and promote your services. 
  • Do a Live Broadcast at least once a month. This allows you to interact with followers directly, get a sense of what your audience is looking for, and showcase yourself as a realtor that is updated to the times. There are many options for live broadcasts, but the most recommended are Facebook Live and Instagram Live.
  • Engage with your audience. Answer questions, provide insight, comment on their posts, and consider showing the “behind the curtains” life of your business. This will make you seem like a real person in the eyes of the buyer instead of just a business. In short, be social. 
  • Participate in our periodic Social Media Classes. We offer Social Media classes for realtors to learn the newest and most relevant practices and techniques to grow their business online. Signup to our newsletter to get updates on our classes. 

It is no secret that these are challenging times. The industry has changed. The old way of doing things is no longer effective and we have all been forced to overcome different levels of adversity. But those that put in the effort to adapt to the new way of conducting business will see the results they desire. 

We, at Title Partners of Florida, write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products, and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone (844) 321-6168 or by email at titleinfo@titlepartnersfl.com.

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New Home Purchase Mortgage Applications See A 54.1 Percent Increase In June 2020

The Builder Application Survey (BAS) sponsored by the Mortgage Bankers Association (MBA) indicates an increase of 54.1 percent in mortgage applications for new home purchases in June 2020, compared to June 2019. The BAS also indicates a 20 percent increase in regards to May 2020. The registered variation does not take into account any adjustment for typical seasonal patterns.

The BAS provides an early estimate of new home sales volumes based on the application volume from mortgage subsidiaries of home builders across the country; as well as data from other sources. The new home sales volumes estimate can be provided at the national, state, and metro levels. 

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, recently stated: “The new home purchase market continues to recover – applications surged 20 percent in June, and although this is not adjusted for seasonal impacts, it is another piece of data indicating that homebuying activity that was delayed by the pandemic in March and April is just being realized later in the season. The fact that applications are up over 50 percent from last June further reinforces that point.” 

Kan also mentioned that the “MBA estimates that new home sales in June increased 15 percent to a seasonally adjusted pace of 774,000 units – which would be the strongest level of activity since January 2020.”

Although the increase in new home mortgage applications and new home sales is a good indicator of a restabilizing market, the tight supply and availability of houses come into question.

In regards to this, Kan added, “We do anticipate that new home construction will speed up to attempt to better meet demand. However, with the low level of homes for sale on the market, the sustainability of the upward trend in home purchase activity will hinge on supply ramping up more rapidly.”

Lawrence Yun, the chief economist for the National Association of Realtors, addressing this topic stated “new home construction needs to robustly ramp up in order to meet rising housing demand.”

According to the MBA’s recent Builder Application Survey, new single-family home sales had an estimated seasonally adjusted annual rate (SAAR) of 774,000 units in June 2020. This represents a 15.2 percent increase compared to May’s SAAR of 672,000 units. 

Analyzing from an unadjusted basis, there were 71,000 estimated new home sales in June 2020, constituting a 9.2 percent increase from 65,000 estimated new home sales in May.

The breakdown of the new home mortgage loans is as follows: 65.1 percent in conventional loans, 22.5 percent in FHA loans, 1.0 percent in RHS/USDA loans, and 11.2 percent in VA loans. 

The average loan size of new homes also recorded an increase of over $4,500, growing from $332,702 in May to $338,589 in June. 

Homebuying activity is seeing steady growth, as May’s BAS report also indicated a spike in new home mortgage applications in regards to May 2019, and the report from June has solidified this fact. 

We, at Title Partners of Florida, write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products, and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone (844) 321-6168 or by email titleinfo@titlepartnersfl.com.

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Despite the pandemic, real estate values are up in 2020. Here is why.

The estimated taxable real estate value rose for most Miami-Dade municipalities and for all Broward county.

The State of Florida performs property appraisals every year in January.  This year, right before COVID-19, the valuation created some agitation in the real estate market. 

The preliminary estimated taxable value increased by 4.6% in Miami-Dade, from $307.2 billion in 2019 to $333.7 billion in 2020. In Broward, it grew by 6.14%, from $199 billion in 2019 to $211.2 billion in 2020. The taxable values will be finalized July 1.

The municipalities with highest overall increase in values including new construction in West Miami. These are municipalities dominated by mid-market housing West Miami 12%, Florida City 11.2%, Hialeah 9.6%, and North Miami 9.4%. The value for existing housing grew, being Hialeah the city with most growth 8%, followed by Florida City 7.6%, El Portal 7.6% and Biscayne Park 7.0%.  

In general, the overall assessment values fell in five upscale municipalities that dominate luxury housing. These municipalities are: Bal Harbour -4.2%, Aventura -3.2%, Key Biscayne -1.5%, North Bay Village -1.5% and Surfside -0.3%.  For existing housing the value fell in the following municipalities that are dominated by luxury housing: Sunny Isles -5.3%, Bal Harbour -4.2%, Aventura -4.1%, North Bay Village -3.3%, Key Biscayne -1.6%, Surfside -1.6% downtown Miami -1%, and Golden Beach -0.1%

The taxable values in Broward had a slight increase for all 31 cities in the county. The increase is credited to three trends in 2019, including population growth, new residential and commercial construction. Marty Kiar, Broward County’s tax appraiser said that there were a lot of properties that exchanged hands.

The most relevant increase occurred in the following municipalities: West Park 9.33%, Lauderdale Lakes 7.32%, North Lauderdale 7.22%, Lauderhill 7.02%, and Oakland Park 6.99%. Lazy Lake had the lowest growth (0.33%).

Kiar says that the bigger increase in West Park happened because a lot of people are moving there, while the lowest increase in Lazy Lake is just because it is the smallest community. It covers only a few blocks, with about 20 to 30 homes.

It is encouraging to know that higher tax values don’t necessarily mean higher property taxes. The property taxes are calculated after counties determine millage rates.

Tom Ringel, a founding partner at the Kendall-based law firm Markowitz Ringel Trusty & Hartog said that, even though the economic downturn, and job losses is making it difficult for some homeowners to afford the increased property taxes, litigation is unlikely. 

Miami-Dade property owners can review their estimated assessed values online at Miami-Dade website, and can file appeals with the county property appraisers. Miami-Dade homeowners can also ask for quarterly payment plans. Perhaps a legislative miracle happens as Kiar said: you never know what can happen – the Florida Legislature may allow us to consider the pandemic for this year or there may be an executive order that would allow us to do so.”

Appealing the assessment of your property may be worth it if you consider the assessment of your property is inflated; however, before moving into that direction, you may want to consider if it is worth or not to request the assessment appeal. In May, Ringel said: “If you think the assessment is unfair, the cost of litigation with attorney fees may be worth it for those $30 million-plus homes, but not for the $600,000 to $800,000 run-of-the-mill houses. The savings won’t be worth it.”   

Hotel owners are already suffering revenue losses from pandemic closures, and may suffer most, Mandler a partner at the downtown Miami-based law firm Rennert Vogel Mandler & Rodriguez, agrees with Ringel. For Mandler it  seems like the hardest hit will be for commercial real estate property owners.

The facts are that the high supply of luxury condos and the decrease in foreign buyers caused a slowdown in the Miami-Dade market. So far, Hialeah real estate increased values in 2020. And according to county property appraisers, new construction prices were higher for both counties before COVID-19.

We, at Title Partners of Florida, write and support the real estate transaction closing, including the issuance of title insurance policies through Attorneys’ Title Insurance Fund. We also coordinate searches, title products, and a variety of other services for our clients. Contact us with any questions about our real estate closing services by phone (844) 321-6168 or by email titleinfo@titlepartnersfl.com.

 

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